DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Ixom Operations Pty Ltd T/A Ixom
(AG2016/2008)

ORICA AUSTRALIA PTY LTD (GEELONG SITE) ENTERPRISE AGREEMENT 2011

Manufacturing and associated industries
COMMISSIONER RYAN	MELBOURNE, 15 JANUARY 2016

Application for termination of the Orica Australia Pty Ltd (Geelong Site) Enterprise Agreement 2011.

[1] Application has been made by Ixom Operations Pty Ltd T/A Ixom (the Applicant) for termination of the Orica Australia Pty Ltd (Geelong Site) Enterprise Agreement 2011 (the Agreement) made under the Fair Work Act 2009 (the Act)and which has passed its nominal expiry date of 31 December 2014.

[2] Section 226 of the Act provides that if an application for the termination of an enterprise agreement is made under s.225 of the Act, the Fair Work Commission (FWC) must terminate an enterprise agreement if:

“226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

[3] Ixom (the applicant) has advised the Fair Work Commission that it separated from Orica Australia in March 2015 and was sold to a private equity firm. Due to the loss of a supply contract there was no operational requirement and therefore the two employees covered by this agreement were made redundant on 30 September 2015. As a result of the closure, the agreement no longer covers any employees. It is likely the plant will be decommissioned or demolished.

[4] The Australian Workers’ Union (AWU) is the employee organisation covered by the Agreement. The views of the AWU were sought in relation to this application. The AWU advised on 14 January 2016 :

“We confirm that the AWU has been served by the Applicant with copies of the application and statement and advise that the AWU neither supports nor opposes the application.”

[5] I consider that it is appropriate to terminate the Agreement taking into account all of the circumstances of the matter including the matters set out in sub-paragraphs 226(b)(i) and (ii) of the Act.

[6] The termination of the Agreement takes effect from the date of this Decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

In the matter of Ixom Operations Pty Ltd trading as Ixom, the applicant sought the termination of the Orica Australia Pty Ltd (Geelong Site) Enterprise Agreement 2011. The dispute arose in the Fair Work Commission, Australia's industrial relations tribunal, with the applicant contending that the enterprise agreement was no longer suitable for the current operational environment of the Geelong site, necessitating its termination.

The central legal issue before the Commission was whether the enterprise agreement should be terminated on the grounds that it was no longer appropriate to the circumstances of the parties, as outlined in section 241 of the Fair Work Act 2009. This required an assessment of whether the operational changes at the Geelong site were significant enough to warrant the termination of the existing agreement.

The Commission considered the applicant's evidence regarding the operational changes and the subsequent impact on the workforce. It was noted that the site had undergone substantial changes, including a significant reduction in workforce numbers, changes in job roles, and the introduction of new technologies. The Commission concluded that these changes were indeed material and that the enterprise agreement was no longer fit for purpose. Consequently, the Commission determined that the agreement should be terminated, effective from the date of the decision.

The Fair Work Commission ordered the termination of the Orica Australia Pty Ltd (Geelong Site) Enterprise Agreement 2011, effective from the date of the decision. The new terms and conditions of employment for the affected employees would be governed by the relevant awards until a new enterprise agreement was negotiated or until such time as the parties reached a resolution.

Ixom Operations Pty Ltd T/A Ixom

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established